Could Facebook Be Worth More Than Google At Time Of IPOs?

When Google Inc. went public in the most spectacular IPO of the past decade, the search company was valued at about $23 billion. The number shot up to around $27 billion after the first day of trading.

But venture-backed Facebook could be worth far more than that when it eventually files for an IPO, writes Jessica Vascellaro, author of today’s Wall Street Journal cover story of Facebook CEO Mark Zuckerberg.

On sister blog Digits, Vascellaro writes that investors who are buying shares of Facebook or plan to buy shares expect the company will go public with a market cap of $35 billion to $40 billion. “Some analysts are even more bullish, suggesting that Facebook could be worth $59 billion in 2011 and more than $100 billion by 2015,” she writes.

Valuations of private companies often fluctuate wildly – Facebook is a shining example. The company bragged in 2007 that its valuation skyrocketed to $15 billion after Microsoft Corp. invested, but other estimates since then have put it at anywhere from half that amount to about $10 billion after Digital Sky Technologies invested in the company last year.

Sharespost, an online marketplace for trading in private companies, including Facebook, estimates the company’s current valuation at $11.5 billion by averaging the latest bid and offer prices with research estimates.

If the valuation estimates reported by Vascallero are anywhere close to what becomes reality once Facebook goes public, the company’s early investors are in for some Google-like returns. Accel Partners, Greylock Ventures, Meritech Capital Partners and Founders Fund’s Peter Thiel which invested at relatively low valuations several years ago, will be able to live off of their investments in Facebook for years the same way Kleiner Perkins Caufield & Byers and Sequoia Capital has done with Google, which made Kleiner Partner John Doerr and Sequoia Partner Michael Moritz billionaires.

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